BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
2364 (Nava)
Hearing Date: 8/2/2010 Amended: A I
Consultant: Bob Franzoia Policy Vote: L&IR 4-1
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BILL SUMMARY: AB 2364 would revise provisions governing
unemployment insurance (UI) benefits to specify that a person is
eligible for benefits where he or she left an employer's employ
to protect his or her family from domestic violence abuse. By
increasing the number of persons who may be eligible to receive
UI benefits, thereby providing for increased amounts payable
from the Unemployment Fund, this bill would make an
appropriation. This bill would make the following technical
amendments to the Unemployment Insurance Code:
- Require the Employment Development Department (EDD), when
making a computation regarding the maximum amount of benefits
payable, to promptly notify the claimant of the method of
computation.
- Reduce the time for reversion from three years to one year for
any unclaimed warrant (check) drawn on an account in the
Unemployment Fund, the Unemployment Administration Fund, the
Contingent Fund, or the Disability Fund by the Controller.
- Repeal the statutory reference to the leisure sharing program.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Expanded definition of Minor, absorbable costs annually Special*
domestic violence for
UI benefits
* Unemployment Fund
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STAFF COMMENTS:
The U.S. Department of Labor has indicated that California's
compelling family reason law as it relates to domestic violence
to qualify for American Reinvestment and Recovery Act (ARRA)
funds. This bill would amend statute by replacing "children"
with "family" qualifying the state for $559 million in ARRA
funds.
The fiscal impact to the Unemployment Fund would be minimal, if
any, as state statutes currently contain provisions that pay UI
benefits when a person leaves employment due to compelling
family reasons. This type of leave is defined in statute as a
"good cause" resignation and is not charged against the
individual employer's UI account.
UI tax rates are assigned to employers based on "experience
rating." Essentially, the more layoffs and benefits paid to
former employees, the higher the tax rate for the employer.
This is meant to encourage employers to maintain a stable
workforce with fewer layoffs. However, socialized costs are
also included when calculating an employer's UI tax rate and
therefore have the potential to increase an employer's tax
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AB 2364 (Nava)
rate although the charges are unrelated to the individual
employer's use of the UI system. (If an employer has already
paid the maximum amount in taxes, but the benefit costs are
higher, those benefits must still be paid. The excess costs are
shared by all employers.)
There would not be any additional cost to notify claimants about
the method of benefit computation as this bill specifies the
process used currently by EDD. Upon the filing of a claim for
UI benefits, EDD provides a Notice of Unemployment Insurance
Award to claimants with their weekly benefit amount and
potential maximum total claim award. In addition, claimants
receive a handbook with information about their rights and
responsibilities, including information on how their claim award
is computed and their claim cancellation rights.
By reducing from three years to one year, the period during
which a claimant may cash a UI benefit check, there would be
unknown potential savings due to a shorter time period in which
the check could be cashed. If not cashed within one year, the
money would revert to the Unemployment Fund. For disability
insurance benefits, unclaimed funds would revert to the
Disability Fund.